agilon health, inc. (NYSE: AGL) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS MAY 20, 2024.

A class action lawsuit has been filed on behalf of those who purchased or acquired agilon health, inc. (“agilon” or the “Company”) (NYSE: AGL) common stock between April 15, 2021, and February 27, 2024, both dates inclusive (the “Class Period”). 

Case Background:

agilon is a healthcare and technology company that acts as an intermediary between physician groups that provide medical services to senior citizens and Medicare and Medicare Advantage insurers.  One of agilon’s key financial metrics is “medical margin,” which the Company defines as medical services revenue less medical services expenses.  

The Class Period begins on April 15, 2021, which is the day after the Registration Statement was declared effective by the SEC and the first day agilon shares were publicly traded in connection with the IPO. 

Throughout the Class Period, Defendants repeatedly touted the strength of agilon’s medical margin.  Additionally, Defendants downplayed the significant cost pressures on the Company’s medical margin and profitability.  For example, on June 7, 2023, just days before other health insurers such as UnitedHealth Group Inc. and Humana Inc. reported significant increases in medical costs, Defendant Bensley, speaking at an analyst-sponsored healthcare conference, reported that Defendants “expect this year to generate somewhere around $550 million of medical margin,” noting that the Company has seen “steady progress on medical margin upwards.”  

Investors began to learn the truth about the cost pressures impacting agilon’s medical margin and profitability on November 2, 2023, when the Company announced its third quarter 2023 financial results after the market closed.  Critically, agilon reported a net loss of $31 million for the third quarter of 2023 and slashed its fiscal year 2023 medical margin to a range between $455 million and $470 million.  Defendant Sell also assured investors that agilon’s more conservative approach to guidance “should reduce the risk of negative claims development next year.”  On this news, the price of agilon common stock declined $3.78 per share, or more than 22% over two trading-days, from a close of $16.89 per share on November 2, 2023, to close at $13.11 per share on November 6, 2023.  

After several additional disclosures in November 2023, investors more fully learned the truth about the cost pressures on agilon’s medical margin and profitability before the market opened on January 5, 2024, when agilon updated its fiscal year 2023 financial results and provided its initial outlook for 2024.  Critically, agilon further slashed its 2023 medical margin guidance more than $100 million, to a range between $340 million and $360 million, due to “higher-than-expected medical costs.”  This represented a decline of more than 34% from the $550 million in medical margin it had predicted.  On the related investor guidance call, Defendant Sell acknowledged that agilon “failed to recognize these elevated cost trends” and had “a data and analytics gap that led to [the Company] being late in both recognizing the magnitude and source of the utilization shifts.”  Defendant Sell further indicated that the increased cost trends were expected to persist through 2024.  Also on January 5, 2024, Defendant Bensley announced that he would retire in 2024.  On this news, the price of agilon common stock plummeted $3.45 per share, or nearly 29%, from a close of $12.08 per share on January 4, 2024, to close at $8.63 per share on January 5, 2024.

Finally, on February 27, 2024, agilon disclosed that its 2023 medical margin had in fact come in at just $299 million for the year – far lower than the range of $340 million to $360 million provided just a few weeks prior.  Furthermore, agilon slashed its 2024 medical margin guidance by 27%. On this news, the price of agilon common stock dropped from $6.48 per share when the market closed on February 27, 2024, to $6.04 per share on March 1, 2024, a 7% decline on abnormally heavy volume of a three-day period.  In subsequent days, the price of agilon stock continued to decline, falling to a low of just $5.66 per share on March 6, 2024, more than 85% below the Class Period high.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.